“More needed to ensure an Australia where all people can thrive.”
This year’s Budget begins to address some of the structural barriers to all Australians being able to live their best life. Social Ventures Australia (SVA) welcomes in particular the announcement of a number of initiatives that we have been advocating for and we look forward to working with the Government to ensure that these investments lead to large scale positive change.
‘The Treasurer put a spotlight on the importance of improving the lives of people in Australia experiencing disadvantage and placed significant focus in multiple measures towards creating a more equitable future for all. This is in line with SVA’s vision for an Australia where all people can live their best life,’ said Suzie Riddell, SVA CEO.
‘The recognition of the role that impact investing can play in creating better outcomes is particularly pleasing given SVA’s history as champions of the Australian impact investing market,’ continued Riddell.
‘We welcome the emphasis on improving the measurement of outcomes, building the evidence of what works, and recognising the people in our communities as experts in their own lives through the support of place-based initiatives. Though they may not feature regularly in headlines, we know these elements are key to any lasting and widespread change.’
Yet while SVA welcomes the combination of measures on impact investing, the care economy and income support, we know that there are significant challenges ahead,’ continued Riddell.
‘There are still big decisions to be made in the near future, particularly in housing, education, early years and income support. SVA remains committed to working with the Government to ensure Australia’s future is one where all people can thrive.’
We have shared our analysis and what the Budget means for our community below.
SVA has been at the forefront of building the Australian impact investing market over the past 20 years. We were deeply involved in working with the Social Impact Investing Taskforce which identified the opportunity for more outcomes-based funding. It is great to see a $100 million dedicated outcomes fund. We look forward to working with the Government on its design.
It was pleasing to see the additional $11.6 million investment to support social enterprises to grow and scale. We know from our 20-year experience working with and investing in social enterprises that a gap in unlocking the full potential of impact investing in Australia is in investment-ready social enterprises.
It will need to be backed up by further investments in blended early-stage capital (combining below market or philanthropic dollars with returnable capital) which are missing from this budget. These kinds of funds have been successful in other countries as a stepping stone on the path to scaling impact.
One of the most significant initiatives being discussed by the Social Impact Investing Taskforce, a wholesale fund, has not been progressed. This should be considered as part of a wider impact investing policy.
We have also previously recommended the creation of an Office for Social Impact Investing to ensure rigorous evaluation and bring new investment opportunities to market – this is still missing. Impact investing will only be successful in Australia if governments can harness the power of its datasets for evaluation to ensure we make effective investments. It was therefore pleasing to see a small but crucial $10 million investment over four years to improve the evaluation capability in Treasury. It will be essential that this group engages experts on social impact measurement, not just economic impact and consider its role in relation to supporting impact investing.
There are also large opportunities for impact investing in social and affordable housing. It is pleasing to see the growth of the mandate for the National Housing Finance and Investment Corporation, along with new incentives to try to stimulate supply in the build to rent sector.
Community-led responses to disadvantage
We are excited to see the significant $64 million investment over six years in Stronger Places Stronger People with the extension of funding providing certainty for existing place-based partnerships and a welcome increase in funding. This is line with recommendations we have made to government through Restacking the Odds, a joint initiative with Murdoch Children’s Research Institute and Bain & Company. This initiative aims to drive equitable outcomes in the early years by ensuring that children and families receive a combination of evidence based, high quality services in their local community.
It is also encouraging to see the investment in frameworks and data to improve the way we tackle disadvantage in community, along with the partnership with philanthropists through the Investment Dialogue, to help drive innovations and improvements in services over time.
We are disappointed not to see a change to the activity test to support more children experiencing vulnerability to access early childhood education. SVA has supported calls by Thrive by Five and others for changes to the activity test which we know is a barrier to improving participation for children who will get great benefit from early childhood education and care. Nonetheless, we’re encouraged by moves to streamline the process for Additional Child Care Subsidy.
Also encouraging and much needed is the $72.4 million investment in professional learning and upskilling educators with funding to services and educators. A valued and professional workforce is crucial for a quality early childhood education and leads to better outcomes for children.
There is great deal of work underway both inside and outside of Government to develop new early years policy including the development of the Early Years Strategy, and reviews by the Productivity Commission and the Australian Competition and Consumer Commission.
The Government’s policy ambition and commitment to the Early Years Strategy needs to match the challenge at hand – fixing a broken and patchy system that doesn’t work for children and families and leaves too many falling through the cracks.
Income support payments have been too low for too long. Smart changes to these payments and eligibility can create enormous impact on wellbeing for those experiencing deep disadvantage. We welcome the raising of the social safety net which SVA and many others have been calling for. The changes announced in the budget are a step in the right direction but there is more to do.
Analysis commissioned by SVA and the Brotherhood of St Laurence has shown that single parents, who are overwhelming women, experience high levels of financial stress. One of the most effective ways to improve outcomes for children and single parents is to improve their financial situation. The change to allow parents to be eligible for parenting payments until their youngest child turns 14, worth $1.9 billion over five years, is a good decision, although the rate of parenting payment remains inadequate.
Raising the rate of JobSeeker and other working age and student payment by $40 a fortnight is welcome, but still insufficient to lift people out of poverty. When taken together with measures that decrease the costs of medications and doctors visits, reduce energy bills and increasing rent assistance, this will do something to help the most vulnerable groups but in a high inflation environment, for many it may not be enough.
We believe there should be a more significant increase that gives people the confidence to start businesses, begin new careers, retrain and find good jobs. In particular we would like to see more help for families doing it tough to make sure every child has the best start in life.
We are pleased to see the first real increase in Commonwealth Rent Assistance in 30 years, worth $2.7 billion over five years. It is an important step to deal with the skyrocketing costs of housing, and something that SVA and others have been working to secure. However, to make sure all Australians have a good home we believe rent assistance should be doubled to $141 a week.
There is a lot more work to do not just through rent assistance but also to build more social and affordable homes for people who need them. That is why we are pleased to see the growing role for the National Housing Finance and Investment Corporation (NHFIC), including increasing its mandate by $2 billion to $7.5 billion to help finance new homes. SVA advocated strongly for NHFIC’s creation and made multiple contributions to policy inquiries on its design, and it is great to see it go from strength to strength.
We welcome new measures worth $25.7 million over five years to encourage further investment in build-to-rent housing projects, and will be keen to see the details of how this might work to ensure that they will unlock more scaled investment in homes that are affordable and appropriate for the people who need them.
Over the course of the Covid-19 pandemic, SVA has continued to highlight the unique financial and operational challenges faced by charities. Charities are a large part of our social and economic fabric, employing more than 1 in 10 workers in Australia.
We appreciate that in this Budget the Government has shown signs of recognising the need to tailor policy to Australia’s charities and non-profits, which has been the core recommendation of our advocacy project Partners in Recovery.
The commitments from the Government to fully fund the Fair Work Commission’s increase in wages for workers in aged care, worth $515 million over five years, and to update indexation arrangements for government -funded services delivered by community sector organisations, are steps in the right direction. It is an important recognition of the value of caring work to our economy and community. Charities make up a significant percentage of this sector, often providing services to the most vulnerable, and face similar rising costs to the rest of the community in a high inflation environment. They can’t afford to carry these costs without government support.
We would like to see the Government make the same commitment in other low-wage sectors where charities are significant providers, especially in other areas of the care economy. We know from our analysis of charities’ financial sustainability that charities are often underfunded to deliver the outcomes that we all expect and they are mostly funded by government contracts.
That’s why we believe charities should also benefit from the same supports that are available to other types of business, and not be disadvantaged by poor policy design. In this Budget, government has recognised that small business needs support with challenges ranging from improving energy efficiency to managing cyber security. Charities face similar challenges, but not all of the business support initiatives are accessible to them – for example, depreciation concessions are of little value to charities. We hope that in implementing these supports, government will ensure that charities can access them equitably.
SVA firmly believes that services for First Nations people should be provided by and led by First Nations people as part of a commitment to self-determination and improving outcomes in community. We are pleased to see the Government committing to fund local First Nations organisations to continue to deliver and expand their important work, including capacity building for Aboriginal Community Controlled Organisations as well as services and programs.
We accept the invitation of the Uluru Statement and support a constitutionally enshrined First Nations Voice to Parliament. We welcome the necessary investment in this Budget for the referendum.
Schools and school funding are not the focus in this year’s budget while the Government embarks on the review of previous National Schools Reform Agreement (NSRA).
While it’s appropriate to take the time to assess the progress of the previous NSRA, Australia’s school system continues to have a gulf between the outcomes for children from families with wealthier backgrounds and those from low-income families.
Subsequent budgets will need to tackle these issues if we are to create an education system that delivers both excellence and equity.
Employment and skills
The existing commitment to invest $3.7 billion for a five-year national skills agreement is important at a time when young people are more likely to be in low-quality, insecure jobs. The low unemployment rate hides the broken career ladder for young job seekers.
The replacement of ParentsNext with a voluntary scheme is a welcome move away from compliance-focused employment programs to approaches that place the needs of people at the centre. We look forward to further announcements from government as the Parliamentary inquiry into Workforce Australia Employment Services, and the Full Employment White Paper, continue.
Government procurement can also create demand – and the $8.6 million Australian Skills Guarantee commitment to 1 in 10 jobs on major Australian Government-funded projects going to apprentices, trainees and paid cadets will help, but it cannot be limited to construction and IT. We look forward to the Commonwealth building on this approach by including additional areas of Commonwealth spending, and including additional equity target groups, such as the long-term unemployed.
We welcome the additional focus on foundation skills, particularly the focus on delivering services for First Nations people through First Nations organisations.